Correlation Between Southwest Airlines and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Southwest Airlines and GreenX Metals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Southwest Airlines and GreenX Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southwest Airlines Co and GreenX Metals, you can compare the effects of market volatilities on Southwest Airlines and GreenX Metals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Southwest Airlines with a short position of GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southwest Airlines and GreenX Metals.
Diversification Opportunities for Southwest Airlines and GreenX Metals
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Southwest and GreenX is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Southwest Airlines Co and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals and Southwest Airlines is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Southwest Airlines Co are associated (or correlated) with GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Southwest Airlines i.e., Southwest Airlines and GreenX Metals go up and down completely randomly.
Pair Corralation between Southwest Airlines and GreenX Metals
Assuming the 90 days trading horizon Southwest Airlines Co is expected to generate 0.96 times more return on investment than GreenX Metals. However, Southwest Airlines Co is 1.05 times less risky than GreenX Metals. It trades about 0.05 of its potential returns per unit of risk. GreenX Metals is currently generating about -0.08 per unit of risk. If you would invest 3,283 in Southwest Airlines Co on September 12, 2024 and sell it today you would earn a total of 64.00 from holding Southwest Airlines Co or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southwest Airlines Co vs. GreenX Metals
Performance |
| Timeline |
| Southwest Airlines |
| GreenX Metals |
Southwest Airlines and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southwest Airlines and GreenX Metals
The main advantage of trading using opposite Southwest Airlines and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southwest Airlines position performs unexpectedly, GreenX Metals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in GreenX Metals will offset losses from the drop in GreenX Metals' long position.| Southwest Airlines vs. iShares Physical Silver | Southwest Airlines vs. AfriTin Mining | Southwest Airlines vs. Premier Foods PLC | Southwest Airlines vs. National Beverage Corp |
| GreenX Metals vs. GoldMining | GreenX Metals vs. Liontrust Asset Management | GreenX Metals vs. Jacquet Metal Service | GreenX Metals vs. Southwest Airlines Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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